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ARTICLE · 24 JULY 2016

North East Solution Pty Ltd V Masters Home Improvement Australia Pty Ltd [2016] VSC 1

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An agreement to act reasonably and in good faith may be sufficiently certain to be enforceable.

AustraliaReal Estate and Construction
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KEYWORDS: GOOD FAITH NEGOTIATIONS

KEY TAKEAWAYS

An agreement to act reasonably and in good faith may be sufficiently certain to be enforceable. The precise nature and extent of the obligations will be determined by reference to the relevant contractual terms and the facts.

Facts

The case concerned the development and lease of a Masters Home Improvement store in Bendigo for Woolworths Limited (Woolworths). North East Solution Pty Ltd (NES) agreed to develop the store for Woolworths and then lease it to Masters Home Improvement Australia Pty Ltd (Masters) for at least 12 years.

The main provision of the Agreement for Lease (AFL) in dispute was clause 2.2, concerning the determination of the extra cost of building a Masters store instead of a Bunnings Store (the Landlord's Work Costs).

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